New Greenhouse Gas Emissions Allowance Trading Scheme Act | In Principle

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New Greenhouse Gas Emissions Allowance Trading Scheme Act

The Polish Parliament has adopted a new act governing the functioning of the scheme for trading in greenhouse gas emissions allowances.

Experience gained during the first six years of functioning of the emissions trading scheme in Poland, as well as recent amendments to the Emissions Trading Scheme Directive (2003/87/EC), made it necessary to tighten the rules governing this area, which were set forth in the current Act on Trading in Allowances for Emissions of Greenhouse Gases and Other Substances into the Atmosphere dated 22 December 2004.
The new law, entitled the Greenhouse Gas Emissions Allowance Trading Scheme Act, is designed to create a transparent set of regulations for:
  • classification of installations covered by the emissions allowance trading scheme
  • inclusion of flight operations by airlines in the system
  • rules for trading of emissions allowances
  • rules for auctioning of emissions allowances
  • creation of an effective system of sanctions to ensure compliance with obligations under the act
The changes introduced by the new act will not be revolutionary, as emissions allowances during the second trading period (2008–2012) are being allocated under the same rules, i.e. under the national allocation plan. The new act does contain regulations concerning sale of some allowances by auction, however.
When the new act comes into force, the authority administering the trading scheme in Poland will change from the National Administrator of the Emission Trading Scheme (KASHUE) to the National Centre for Emissions Balancing and Management (KOBiZE).
One important change is inclusion of aviation within the trading scheme, alongside energy and industry, implementing the amendments to Directive 2003/87/EC.
The new act will also introduce the rule of free disposal of emissions allowances, permitting allowances not used during a current trading period to be replaced by a corresponding number of allowances valid during the following period.
Significantly, under the new act, beginning 1 January 2013 the scheme will include not just carbon dioxide (CO2), but other greenhouse gases as well, namely nitrous oxide (N2O), as well as perfluorocarbons (PFCs).
There is a very short grace period in the new act, which is to come into effect just 7 days after publication. According to the justification for the act, this haste is dictated by the urgent need to implement EU regulations and enable airlines to obtain free allowances.
Given the short grace period, it is also important to note the various obligations that operators of installations must meet shortly after the new act goes into effect.
First, within 60 days after the effective date of the act, operators of installations will be required to apply for amendment of their permits and approval of their emissions monitoring plans, unless their current permits already meet the requirements from the new act.
Second, operators of aircraft interested in obtaining free allocation of emissions allowances for aviation activity during the trading periods beginning 1 January 2012 or 2013 will be required to file applications for the allowances with the Minister of the Environment “promptly after the effective date of the act.” While the term “promptly” is not defined in the act, the act does provide that the Minister of the Environment should forward the applications from aircraft operators to the European Commission by 30 June 2011. This effectively means that airlines will have to file applications immediately after the new act comes into force.
Third, aircraft operators who performed aviation operations in 2010 must immediately file with the National Centre for Emissions Balancing and Management the figures concerning the amount of their emissions in 2010. These operators are also required to submit applications for approval of their monitoring plans within 30 days after the effective date of the new act.
Finally, because the new act expands the list of types of stationary installations covered by the trading scheme, operators of installations that are not covered by the scheme during the current trading period (2008–2012) but will be covered by the scheme from 2013 onward are required to obtain permits by 30 June 2011.
The new act was approved by the Sejm on 28 April 2011 and by the Senate on 26 May 2011, and now awaits signing into law by the President of Poland.
Maciej Szewczyk, Environmental Law practice, Wardyński & Partners